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January 27, 2010

City shells out another $31 million to help developer Bruce Ratner buy land for Atlantic Yards

NY Daily News
by Erin Durkin

You can't make this stuff up. On the same day that Mayor Bloomberg traveled to Albany to argue that the proposed state budget would force the city to make $1.3 billion in cuts and lay off 19,000 workers, including police and firefighters, newly released Atlantic Yards documents revealed that the Mayor had kicked in another $31 million of the taxpayers' all-to-scarce money for Bruce Ratner's economically nonviable arena boondoggle.

The city has shelled out another $31 million to help developer Bruce Ratner buy land for his controversial Atlantic Yards project, new documents show.

That's on top of $100 million the city previously pledged to buy up property for the new Nets arena and 16-tower project, bringing the total to $131 million.

An updated funding agreement signed in October and released this week said the $31 million would be used to buy four properties on Dean St.

City officials said the subsidy won't cost taxpayers more money - instead, the $31 million will be subtracted from $105 million previously pegged to pay for infrastructure improvements around the 22-acre project site.

"No additional money has been promised or transferred," said Economic Development Corp. spokesman David Lombino.

The funding was moved because the cash-strapped developer needed more money up front - and Ratner will be contractually required to foot the bill for the infrastructure work down the road, officials said.

But project opponent Councilwoman Letitia James (D, WFP-Prospect Heights) dismissed that as an accounting gimmick - and said even if the city's bottom line remains the same, it's a slap in the face to use taxpayer money to buy property under the threat of eminent domain.

"It's a government Ponzi scheme," she said.


Related coverage...

Atlantic Yards Report, Did the city give Forest City Ratner $31 million more for arena land? Despite previous reports, the answer is yes (Updated)

Given that the city initially pledged $100 million in subsidies, then added $105 million, it's hard to believe there's a full ban on future subsidies, nor that future administrations would feel bound to not kick in for infrastructure subsidies.

Brownstoner, City Gives Ratner $31 Million for Dean Street Buys

The city claims that it hasn't increased the total amount of subsidies it's kicking in to the project (well, not since it first increased the total amount of subsidies from $100 million to $205 million); instead, the city argues, it just moved up some of the money that was originally allocated for later-stage infrastructure to help pay for the property purchase. The Atlantic Yards Report calls the legitimacy of the move "murky," because while it technically does not violate the letter of the 2005 non-binding Memorandum of Understanding (after all, it was non-binding!), it's clearly a bait-and-switch on the public.

Posted by eric at January 27, 2010 11:51 AM